Borrowers are getting the opportunity to turn the tables on bank creditors. The recent financial engineering and resulting financial instruments required by the securitization of mortgages has created a defense to the lenders attempting to foreclose on those defaulting borrowers.

On Oct. 9 in federal bankruptcy court in the Southern District of New York. A judge ruled that a alleged lender, PHH Mortgage, hadn’t proved its claim to a delinquent borrower’s home in White Plains, Judge Robert D. Drain wiped out a $461,263 mortgage debt on the property. That’s right: the mortgage debt disappeared, via a court order. If the lender can’t come forward with proof of ownership, then borrowers may have a stronger argument in court and, may even be able to stay in their homes mortgage-free.

Securitizations allowed for large pools of bank loans to be bundled and sold to legions of investors, but some of the nuts and bolts of the mortgage game — notes, for example — were never adequately tracked or recorded during the boom. In some cases, that means nobody truly knows who owns what. Click here to learn more.